Vice-Minister for Labour Carlos Mateu said the current system - in place since the communist revolution in 1959 - was no longer "convenient".
He said wage differentiation should improve production and services.
President Raul Castro has introduced a series of reforms since succeeding his ailing brother Fidel in February.
Writing in the communist party newspaper Granma Mr Mateu said workers would receive a minimum 5% bonus for meeting targets but with no ceiling on salaries.
Managers could earn a 30% bonus if the team working under them increased production, he said.
The minister pointed out that the current wage system sapped employees' incentives to excel since everyone earned the same regardless of performance.
"It's harmful to give a worker less than he deserves, it's also harmful to give him what he doesn't deserve," the newspaper article said.
Challenging Marxist orthodoxy
But the impact in terms of purchasing power will be limited, the BBC's Michael Voss in Havana says.
Raul Castro has brought in a series of gradual social reforms
The average wage in Cuba for everyone - from doctors to farm labourers - is about $20 (£10) a month.
full: http://www.bbc.co.uk/go/homepage/i/int/news/world/1/-/news/1/hi/world/americas/7449776.stm
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And now for Marx, the 'ultra-leftist':
An enforced rise in wages (disregarding all other difficulties, including the fact that such an anomalous situation could only be prolonged by force) would therefore be nothing more than better pay for slaves and would not mean an increase in human significance or dignity for either the worker or the labour.
Even the equality of wages, which Proudhon demands, would merely transform the relation of the present-day worker to his work into the relation of all men to work. Society would then be conceived as an abstract capitalist.
Wages are an immediate consequence of estranged labour, and estranged labour is the immediate cause of private property. If the one falls, then the other must fall too.
http://www.marxists.org/archive/marx/works/1844/manuscripts/labour.htm
Mike B)
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